The Battle of Sligo Creek Golf Course, Part One

Much has been written about the fate of Sligo Creek Golf Course in numerous blogs and MSM articles. But all of these writers came to the dispute late. I live five blocks from Sligo and have dealt with the issue for more than two years. Now let the history of the conflict be told in full.

The controversy has its roots in actions undertaken by the County Council in 2006. Park and Planning operated four county-owned golf courses: Northwest, Needwood, Little Bennett and Sligo. The four-course system had lost money for seven years in a row, with the annual loss growing from $522,759 in FY 2000 to $1,432,178 in FY 2006. Those losses required taxpayer subsidies approved by the council. At the same time, the Montgomery County Revenue Authority (MCRA), a quasi-governmental entity controlling five other public golf courses, had earned positive net income for seven years in a row. The County Council’s Planning, Housing and Economic Development (PHED) Committee became convinced that MCRA was a better golf manager than Park and Planning and could make the county’s four-course system solvent. So the Council unanimously approved a bill that directed Park and Planning to lease the four courses to MCRA with the expectation that better management could stop the losses.

The lease contained one out for MCRA: it could turn over a course back to Park and Planning if that course lost so much money that it posed a threat to the system’s solvency. The language in the lease states:

Upon a determination by Tenant [MCRA], based upon an independent financial analysis of the entire Golf System that indicates that any of the Park Golf Courses is adverse to the entire Golf System, Tenant shall have the right to extract any of the Park Golf Courses from the Lease and return it to the Landlord [Park and Planning]; provided, however, Tenant shall first present such findings to the Planning Board and the County Council to consider alternatives to closing the Park Golf Course. Upon the return of such Park Golf Course to Landlord, Landlord shall not operate such Park Golf Course in competition with Tenant as determined in accordance with Section 2.1. Other than as provided in Section 3.2.2, Tenant may not exercise its right to close the Little Bennett Golf Course under this Section 12.2 until the Little Bennett Debt has been paid and released in full.

Council Member Steve Silverman, then the Chair of the PHED Committee, elaborated on the circumstances under which MCRA could turn a golf course back to Park and Planning on the day of the vote:

The threshold test is not that a particular course is losing money but that, in fact, it is the loss of monies in connection with one of the golf courses is adverse to the entire golf system which means in effect, it has the potential for taking the entire golf system. Under those circumstances, the tenant could take that Park golf course and return it to Park and Planning.

Just prior to MCRA’s taking over Sligo and the other three Park and Planning courses, MCRA hired Keith Miller as its new Executive Director. Miller is an extremely bright and aggressive golf course manager who was once a Regional Manager for Arnold Palmer. But he had two problems. First, Little Bennett Golf Course, one of the four turned over to MCRA by Park and Planning, suffered from debt service costs of $405,000 per year and the lease specifically prohibited MCRA from shedding it. Second, the Montgomery County Airpark, which is also operated by MCRA, was experiencing growing financial problems and conflict with the surrounding community. Miller wanted to find a way to stabilize MCRA’s finances and he quickly concluded that the best way to do it was to exploit one of his system’s most valuable assets: Sligo Creek Golf Course.

Miller’s plans collided with Sligo’s neighbors in ways that led to today’s dispute. We’ll find out how in Part Two.